Are you looking to obtain finance for your family trust? Some lenders treat trust loans differently to standard residential loans!

Read on to find out if your circumstances qualify for a family trust loan.

How much can I borrow?

The amount that you can borrow depends on the loan product that you require:

  • Investment loans: 95% of the property value.
  • Low doc (no income evidence): 80% of the property value.
  • Discounts: Competitive professional package and basic loan discounts are available.

Low doc family trust loans are only available from a few select lenders. Please discuss this with us before you begin looking for a property to buy.

Some lenders have restrictions on lending to family trusts with a company as the trustee, but can accept trusts with a personal trustee.

Do you want to obtain finance for your family trust? Please enquire online or contact us on 1300 889 743 to speak to a specialist mortgage broker who can help you get your loan approved.

How do banks view family trusts?

Banks view family trusts in the same way as they view discretionary trusts and almost half of the Australian lenders will decline loans for discretionary trusts.

Many will instead refer you to their business banking department who will then charge a higher rate and additional fees.

We have mortgage brokers that specialise in family trust lending and can find a lender to approve your mortgage with a normal residential loan with professional package discounts.

How can we help?

We can help you by looking at your entire situation and finding a bank that will lend to a trust.

  • We know which lenders will approve loans for family trusts.
  • We know which lenders can accept family trust loans without the need for beneficiaries to be guarantors.
  • We can get your loan approved with lenders that have fewer fees for guarantee & indemnity documents.
  • We know how to structure loans with the correct entities as borrowers and mortgagors. We’ll even discuss this with your accountant to be 100% sure.
  • For the majority of family trust loans our services are completely free!

Simply call 1300 889 743 or compelte our free online assessment form.

The beneficiary problem

Property investors often see their accountant, setup their trust, then go to their bank to get a pre-approval for a loan.

A problem then arises as most banks want all of adult beneficiaries to be guarantors for the loan!

This means that in order to get a loan, they must put their son, daughter, spouse, a friend, parents & any other beneficiaries on the loan. Without doing so, their loan application will not be approved.

They would all need to provide income, asset & liability details as well have meet other borrowing criteria.

This becomes incredibly cumbersome, and of course many beneficiaries do not want to be personally responsible for the family trust’s loan.

The solution?

Not every lender requires beneficiaries to be guarantors!

The secret is to apply with a flexible lender that has competitive pricing and a reasonable policy regarding guarantees from beneficiaries.

To find a lender that will approve your loan and offer you the best interest rates around, please enquire online or call us on 1300 889 743 and one of our mortgage brokers will help you to find the best solution for your situation.

Which banks can approve loans for family trusts?

Unfortunately it is not as simple as knowing which lenders will consider loans for family trusts.

Lenders are constantly updating their guidelines for both family trust loans and family trust low doc loans.

However, we know over 40 accredited major banks and non-conforming lenders.

We can help you pick a lender that has flexible lending guidelines and a loan package that suits your needs.

What is a family trust?

Family trusts are a type of discretionary trust where the beneficiaries of the trust are all related. For this reason they are often referred to as a “family discretionary trust”.

Just like with a discretionary trust, the trustee can distribute income to various family members, as they see fit.

What are the benefits of a family trust?

Since, a family trust is like a discretionary trust, the income and profits from the trust can be distributed to the children or young adults that have lower taxable incomes.

Discretionary trusts are also used to assist protect assets in the event that one of the family members has a business failure or marriage breakdown.

Some families use a family trust as a method of passing assets to future generations.

Speak to our mortgage brokers

Do you need the help of an expert mortgage broker? Our brokers are trained to handle trusts and understand what it is you are looking for!

Please contact us on 1300 889 743 or enquire online and one of our mortgage brokers will help you select the best lender around and apply for a home loan.

  • TaylorS

    We’ve setup a family trust with all the parents of my husband and mine in it. Now, we’re trying to buy an investment property so that we could retire there later after a decade. We’ve prepared almost all the required docs and deposit, so I want to know the available discount rates for the trust loans.

  • Hi TaylorS,

    It is great that you have all the required documents in place to put through for your loan application.

    If you are after a discounted rate for your loan, we could make a special request to the lender if your application meets the lender’s criteria. You will have to speak to one of our mortgage brokers to get more information on rates.

  • Delvin M

    Is it possible to get a discounted family trust home loan?

  • Hi Delvin,

    Yes, it is. The secret to getting your loan approved is to know which lender can work with your particular type of trust and your proposed loan amount. It’s important to make sure that the lender processes your loan as a residential loan and not a commercial loan, otherwise you’ll pay more fees and a higher rate. In addition to this, many lenders cannot approve residential loans for trusts at all, which leaves many people wondering how they will be able to buy an investment property in a trust.

  • Metters

    What about borrowing using my SMSF? What are the policies regarding that?

  • Hi Metters,

    We have an entire section on SMSF loans and the policies regarding them. Please have a look at the SMSF loans section and feel free to comment or call us on 1300 889 743 if you want to discuss anything. Here’s the link to the section:

  • Ysolda

    What’s the max interest only term if I’m going for an investment mortgage?

  • Hi, the maximum interest only term available in Australia is 15 years. However, most lenders will only allow a 5 year interest only period. With a select few lenders, we can help you get a 10-year term. You can go higher but only two lenders offer a 15 year interest only period.

  • WY

    I need a family trust loan to build a dual occupancy house in Toowoomba. The LVR will be 90% and I’d like to get the loan as soon as I can.

  • We have a few lenders in mind that can help. Please call 1300 889 743 and discuss your situation and loan needs in detail with one of our trust loan specialists so we can come up with a list of recommendations and offers and move things along quickly.

  • Tanya Kortum Shively

    do you have any lenders who can do this type of mortgage in the US?

  • Dani. D.

    If the value of the land is $500,000. How much land tax would the discretionary trust have to pay…? Is it possible to claim interest on the loan…?

  • Hi Dani,
    Normal stamp duty and council rates would apply. As for land tax there is no tax free threshold for a trust so it would pay this on the full $500,000. The duty varies between states. For NSW it would be 1.6% so around $8,000 p.a.
    You can claim a deduction for the interest on the loan but it may be isolated in the trust. In other words the trust makes a loss and so this carries forward each tax year until the rent has gone up and you are now positively geared. Then you can write the interest off against that profit. You can’t distribute a loss from a trust. Please discuss with your accountant as the tax laws are complicated and I don’t know your situation.

  • Dani. D.

    What if the beneficiaries were to live in the property and it wasn’t rented out…?? Thanks for your reply…i think the rate in 1.5%??

  • In Victoria the land tax rates are a bit complex, you can find them here
    In terms of the beneficiaries living in the property it’s best to talk to an accountant. From a lending point of view this is ok. From a tax point of view I don’t know.

  • If I purchase an investment property under a family discretionary trust, and it makes a shortfall on the loan repayments each month, I’d have to inject funds into the trust to make the repayments. Is this considered a loss on my personal income tax or a loan to the trust? How is this type of situation usually dealt with?

    Secondly, if the borrower is in my personal name but the trust holds the property title, am I still able to claim interest repayments on my personal income?

  • Hi Carl,
    No this would not be a loss on your personal income and so you could not tax deduct it. It would be you lending money to your trust.
    Secondly yes if the loan is in your personal name and the loan is to buy units in a unit trust (normally this is with a unit trust not discretionary) then you can tax deduct the loan in your personal name and therefore get around this problem.
    We are not accountants so our information may be incorrect. Please discuss with an accountant and then just let our mortgage brokers know how you’d like the loan to be set up and we can do this for you.

  • Bernie

    I’m planning to buy an investment property in the name of my family trust. What specific documents are required for a mortgage application?

  • Hi Bernie,

    There are several documents that the bank will need from you in order to process a loan for a family trust: a certified copy of the stamped trust deed, a certified copy of the company constitution (if there’s a company trustee), identification for all trustees, directors of trustees and beneficiaries of the trust, and tax returns and notices of assessment for the trust (not always required, in particular for low doc or for new trusts).
    Please talk to us on 1300 889 743 or fill in our free assessment form for a specific list of required documents.

  • Dede

    Can a guarantor be someone from outside a trust? If so, what trust structure would work best in this scenario.

  • Hi Dede,
    Thanks for the questions.
    Unfortunately, lenders won’t accept a guarantor from outside the family trust.
    An acceptable guarantor needs to be either the director of the corporate trustee, or an adult beneficiary of the trust.

  • Emmett

    Hi there,
    I’m looking to form a property portfolio and trying to figure out if forming a family trust with a company trustee as the director is a suitable idea, given that I operate in quite a litigious environment (being a dentist and all). It seems quite complex trying to get loans through all those structures.

  • Hi Emmett,

    It is best to contact an accountant and a solicitor as to the best way to structure a trust for business and asset protection. Most lenders prefer a discretionary trust, and some have restrictions on lending to family trusts with a company as the trustee, but can accept trusts with a personal trustee. We will work with your accountant on how to structure these loans and most of our family trust loans services are completely free. Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743 or fill in our online enquiry form: